Indian Pharma Shifts to Renewable Energy Amidst Export Market Pressure

India's pharmaceutical sector is witnessing a steady shift towards renewable energy adoption and stronger sustainability practices, driven largely by rising pressure from regulated export markets such as Europe and the UK, according to a study by ICRA ESG Ratings Limited.Renewable Energy Use JumpsThe report said renewable energy (RE) consumption across a sample of 53 pharmaceutical companies rose from 17 per cent in FY2023 to 25 per cent in FY2025, reflecting a gradual move towards cleaner energy sources. Active Pharmaceutical Ingredients (API) manufacturers recorded the sharpest rise, with RE usage increasing from 21 per cent to 31 per cent during the period, while formulation manufacturers improved from 9 per cent to 17 per cent. Integrated players saw RE adoption rise from 20 per cent to 30 per cent.Export Regulations Accelerate Green Shift"Renewable energy (RE) is the central decarbonisation lever; procurement mode matters," the report noted, adding that large export-oriented firms are increasingly adopting open-access and group-captive renewable power procurement models.The study highlighted that sustainability adoption in the pharma sector is being accelerated by overseas regulations and procurement requirements. According to the report, "Europe and the UK are increasingly linking procurement to sustainability performance, through regulations such as EU CSRD, CBAM, and UK NHS Net Zero requirements."Emissions and Waste Remain Key ChallengesICRA said API manufacturers remain the most environmentally intensive segment because of their dependence on chemical synthesis, solvent recovery, and thermal energy use. The segment recorded the highest emission intensity, nearly three to four times higher than that of formulation manufacturers.The report added that formulation companies demonstrated the sharpest reduction in emission intensity, declining by nearly 30 per cent over FY23-25 due to increasing electrification and renewable energy usage.Hazardous waste generation also continues to remain a key challenge for the sector. API manufacturers accounted for nearly 67 per cent of the hazardous waste share, while formulation players stood at around 38 per cent. Integrated companies reported improved recycling and waste recovery rates because of scale advantages and integrated operations.Governance Lags Behind Sustainability TargetsOn governance, the report noted that only around 35 per cent of pharmaceutical companies have dedicated board-level ESG committees, even as nearly 59 per cent have already established emission-reduction targets."Customer-cascaded SBTi commitments, mandatory carbon reduction plans for export contracts, and BRSR core maturation will pull Indian pharma into deeper disclosure and target setting faster than internal governance can institutionalise," the report said. (ANI)(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)

Indian Pharma Shifts to Renewable Energy Amidst Export Market Pressure

Synopsis

Driven by pressure from regulated export markets like Europe, India's pharma sector is boosting renewable energy use, with consumption set to reach 25% by FY2025, according to an ICRA study. API manufacturers show the sharpest increase.

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